Precursor Ventures moved from taking 20% ownership at seed stage to smaller stakes, betting that being part of a huge winner matters more than the percentage. But the industry now only funds companies targeting $10 billion valuations. A $1-2 billion exit that would have thrilled investors twelve years ago is now considered too small.
Chapters
The other thing that like made me chuckle is, you know, we've always been a low ownership, high upside firm. And for a long time, the seed people were like, nope, gotta have 20% of the company, otherwise can't do the deal. Business model, portfolio construction, let me show you my spreadsheet. Now people are just like, well, if the companies are big enough, it's more important to be in them than to worry about how many basis points of ownership you have. And I think this is the biggest change in venture in my career. Which is that there's really just one model in the business right now, which is it's sort of $10 billion company minimum or bust. If you can't demonstrate to people that you have one of those, the probability that you will raise more money to keep going is incredibly low. There's just like very little appetite. And you know, 12 years ago, people would have been excited for a $1 to $2 billion company. And now people are just like, well, that's a Series A or B stage company, depending on the category. That's That's not the game we're in. And I think it's very hard for founders to envision what a $5 to $10 billion opportunity looks like if you haven't been around one, because that's been my experience.
